ERSA’s Working Paper Series was established in 2004 with the first Working Paper being published in February of 2005. The Working Paper Series remains one of the central mechanisms through which ERSA supports the quantity, quality and relevance of economic research produced in South Africa.
Why Higher Trend Inflation Makes Monetary Policy More Costly in South Africa
Most inflation-targeting central banks target a small but positive underlying rate of inflation, often called trend inflation1. Yet its appropriate level remains uncertain. The extended deliberation in South Africa to move from a 3 - 6% target band to a 3% point target (with a ±1% tolerance band) illustrates this tension. In our working paper (Trend Inflation and the Costs of Price Dispersion in a Fiscal DSGE Model), we examine the role of trend inflation in an economy and argue that, all else equal, lower trend inflation is better for the economy.
Copyright (c) 2026 https://creativecommons.org/licenses/by/4.0
Unlocking sustainable and inclusive growth in South Africa: Advancing the electricity reform agenda
South Africa continues to face deep structural bottlenecks to growth, including weaknesses in the business environment, limited workers’ employability and access to jobs, and persistent inefficiencies in key network industries such as transport, water, and electricity. These challenges are underscored in the 2025 Economic Survey of South Africa, released in June 2025. Although notable progress has been made under Operation Vulindlela, significant obstacles remain, including within the electricity sector (OECD, 2025). Electricity is a foundational input for economic activity, central to firms’ production decisions and to the functioning of the broader economy. This note examines how restoring energy security, accelerating renewable deployment, and reforming municipal and pricing structures can stimulate growth and support a just and sustainable green transition.
Copyright (c) 2025 https://creativecommons.org/licenses/by/4.0
Macroeconomic effects of lowering South Africa’s inflation target: An SVAR analysis
The paper estimates the macroeconomic effects of shifting to a lower inflation target for South Africa, within a Structural Vector Autoregressive (SVAR) framework identified using the Max Share Identification strategy and estimated with Bayesian methods. We find that a decrease of 1% (in terms of percentage points change) in the inflation target leads to output expanding over the next few quarters after an initial muted response, with a peak of about 1.20% after about two years and remains positive and statistically significant for nearly three years after the shock. We also observe a short and medium-term co-movement of inflation and the nominal policy rate in response to the inflation target shock, reminiscent of Neo-Fisherian effects. However, unlike most of the findings in the literature whereby the effects of inflation target shocks are persistent, we find that they are less persistent for the South African economy with this finding being robust to using an alternative identification approach. We find a strongly operative sovereign credit risk and asset price channels through which lower inflation target increases output. These findings are relevant for emerging markets where sovereign credit risks tend to be elevated compared to developed economies.
Institutional Quality: A hurdle or a catalyst to eliminating energy poverty in sub-Saharan Africa?
Energy poverty is considered a significant challenge in sub-Saharan Africa (SSA), significantly impeding economic growth and social development. This study examines the role of institutional quality in addressing energy poverty across 45 SSA countries from 2002 to 2022, focusing on two critical indicators: access to clean cooking technologies and fuels and access to electricity. This study explores six institutional quality indicators—Control of Corruption, Regulatory Quality, Government Effectiveness, Rule of Law, Voice and Accountability, and Political Stability—and finds that corruption control is a key factor in reducing energy poverty across various income groups. Political stability is also linked to lower access to clean cooking, while the rule of law supports electricity access. Additionally, urbanisation is identified as a crucial factor for improving electricity access. This study underscores the central role of institutional quality in addressing energy poverty in SSA and calls for further research that includes infrastructure investment, affordability, and sustainability to better understand the complexities of energy access challenges in SSA.
Time to rethink skills development An independent review of the Sector Education and Training Authority system
South Africa’s persistent skills shortage remains a critical barrier to economic growth. The Sector Education and Training Authority (SETA) system was a well-intentioned state-led intervention 0established to address critical skills shortages. The report finds that the system has proven to be inefficient and ineffective and proposes moving to a more effective approach that prioritises skills for growth.
Public Transport, Sexual Harassment, and Social Norms: Some Evidence from South Africa
<span style="font-size: 11.0pt; line-height: 107%; font-family: 'Calibri',sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: 'Times New Roman'; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-ZA; mso-fareast-language: EN-US; mso-bidi-language: AR-SA; mso-bidi-font-weight: bold;">South Africa has been experiencing rapid urbanisation, with 8 in 10 people expected to be living in urban areas by 2050. This structural change necessitates improved coverage and frequency of transport systems in the country, especially since a significant proportion of the population relies on public transport. According to existing evidence, women and men have different experiences with the usage of public transport. For example, women tend to have non-linear travel patterns (“trip-chains”) between home, work, childcare and shopping, whereas men tend to have more linear travel patterns from home to work and back. This trip-chaining makes transport more costly for women. Women are also more likely to be travelling with babies and children, which means they require safety and easy accessibility on public transport.
Home Foreclosure Discounts in Auctions Without Reserve Prices: Evidence from Cape Town
In South Africa, when a homeowner defaults on their mortgage, the lender may obtain a court order to repossess the property. Subsequently, the property is sold through a public auction at the local sheriff’s office. While it is common for auctioned properties to sell at a discount, global evidence indicates that these discounts are usually small, due to legislative safeguards at auctions. The most common of these safeguards is the use of reserve prices at auctions, which set a minimum acceptable bid and are typically based on the outstanding mortgage balance, unpaid taxes, or the property's appraised value. These safeguards are crucial, as economic theory suggests that without them, prices for properties sold at auction tend to be lower than if the same property were sold on the non-auction market.
Trend Inflation and the Costs of Price Dispersion in a Fiscal DSGE Model
Most inflation-targeting frameworks implicitly endorse a positive trend inflation rate as desirable. Yet, consensus on an optimal inflation target remains elusive, particularly for economies such as South Africa, which employs a broad target band of 3% to 6%. Using a medium-scale New Keynesian DSGE model with fiscal dynamics, this paper demonstrates that even moderate levels of trend inflation (between 4% and 6%) entail substantial real resource costs due to increased price dispersion. Elevated trend inflation amplifies resource misallocation between supply and demand sectors, flattens the Phillips curve, increases markup variability among firms, and weakens the economy’s responsiveness to shocks. Consequently, steady-state output declines, welfare losses escalate nonlinearly, and the sacrifice ratio—measured as the output cost of reducing inflation—rises markedly. Bayesian estimation on South African data (2000Q1–2024Q2) confirms that excluding trend inflation in a Taylor rule framework exaggerates policy inertia and understates the aggressiveness required to stabilise inflation. Allowing trend inflation to drift toward the upper bound of the target range thus increases macroeconomic volatility and erodes welfare. In contrast, anchoring inflation expectations closer to 3% mitigates price dispersion, restores a steeper Phillips curve, and improves macroeconomic welfare outcomes.
The Consequences of United States Tariff Increases for South African Exports
The imposition of widespread import tariffs by the United States (US) under President Donald Trump in 2025 has disrupted international trade patterns and poses serious risks to South Africa’s (SA’s) exports. These tariffs build on policies from President Trump’s first term that targeted steel and aluminium products under Section 232.1 These Section 232 tariffs have since been raised to 50% and expanded to also cover additional derivative products. Automobiles and parts (25% tariff), as well as copper products (50% tariff) have also been targeted this year. Earlier this year (2nd April), President Trump also invoked the International Emergency Economic Power Act (IEEPA) to impose a 10% reciprocal tariff on imports from most countries, with country-specific (30% for SA) reciprocal tariffs to kick in from the 1st of August, unless an alternative agreement is negotiated. Some countries, including United Kingdom (UK), European Union (EU), Japan, Indonesia, Philippines and Vietnam have made progress in negotiating trade deals that reduce reciprocal tariff rates, and in the case of Japan, EU and UK, lower tariffs (10% to 15%) on vehicles. Although, these don’t directly impact SA, they have an indirect effect by reducing the competitive advantage of SA exporters in the US market. The tariff measures pose serious risks to South African exports, undermining the competitiveness of key sectors and eroding the benefits of preferential access under the African Growth and Opportunity Act (AGOA).2 This brief quantifies the likely impact on South African exports, and recommends coordinated policy responses to the various tariff increases in 2025.
Do opinions on fair salaries vary with gender in South Africa?
This study uses two survey experiments to test whether South African respondents perceive fair salaries differently for male and female workers in identical roles. Respondents were randomly assigned to evaluate vignette-based job descriptions in which only the character’s gender (indicated by names) varied. Across both experiments (one using open-ended salary estimates and the other a closed-ended comparison), we find no evidence of gender bias in wage fairness perceptions. Respondents did not assign lower pay to women than to men, even after introducing signals of productivity or caregiving responsibilities. Instead, salary judgments varied by job type, with lower pay suggested for roles traditionally held by women (cashier and nurse), regardless of the character’s gender. These results suggest that public attitudes may support pay equity, with persistent gender wage gaps in South Africa perhaps rooted in occupational sorting and structural inequalities, rather than attitudinal bias.
Gender bias; gender wage gap; fair wage perceptions
Trade Turbulence: The Consequences of United States Tariff Increases for South African Exports
The imposition of widespread import tariffs by United States (US) President Donald Trump in 2025, invoking powers under Section 232 and the International Emergency Economic Powers Act (IEEPA), has introduced significant disruptions to global trade. South Africa (SA) is among the countries directly affected, with major export products such as vehicles, steel, and aluminium now subject to tariff hikes ranging from 25% to 50%. Additionally, a 10% reciprocal tariff on all imports into the US has been imposed, with a 30% rate scheduled to take effect from 1 August 2025 unless an alternative agreement is negotiated. These measures pose serious risks to South African exports, undermining the competitiveness of key sectors and eroding the benefits of preferential access under the African Growth and Opportunity Act (AGOA). This paper utilises multiple data sources, including the United States International Trade Commission (USITC), UN Comtrade, South African Revenue Services (SARS) and the World Trade Organisation (WTO) - Organisation for Economic Co-operation and Development (OECD) Balanced Trade in Services (BaTiS) database, to conduct a comprehensive analysis of the implications of the recent US tariff increases for South African exports. The analysis is carried out with an in-depth examination of bilateral trade between the US and South Africa, a detailed assessment of the tariff proclamations that have altered US duties on South African imports, and a simulation of the potential impact of these tariff changes on South Africa’s exports both to the US and to third country markets, specifically Sub-Saharan Africa (SSA).
Digital Infrastructure and Local Economic Development: Early Internet in Sub-Saharan Africa
We investigate the impact of early internet availability at basic speeds on local economic development in remote areas of developing countries by analyzing nighttime light emissions across towns in Sub-Saharan Africa. Using a difference-in-differences approach, we exploit submarine cable arrivals, which established countrywide internet connections, and the rollout of the national backbones, which defines internet access within countries. Estimating on incidentally connected mid-sized towns, we find that early internet availability increases nighttime light intensity by 10 percent. We consider increased employment as the main explanation. Our findings highlight the importance of closing the digital divide for regional development.
Strategic market games with interim price information
Is it possible to incorporate the rational expectations concept of interim price information from competitive equilibrium models into simultaneous move games? In addressing consistency and measurability issues that arise from the "chicken-egg" problem of rational expectations, strategic market games with interim price information do exactly that. In these non-Bayesian games informed traders simultaneously submit their linear demand-schedules to a Walrasian auctioneer after they have observed their private signals and their interim price information. I show that a specific class of Bayesian Nash equilibria from Bayesian market games (Kyle 1989; Vives 2011) carries over to 'become' Nash equilibria of strategic market games with interim price information. I also show that conditioning on interim price information may give rise to Nash equilibria that support price-collusion between informed traders against a liquidity trader (e.g., the government in a procurement situation).
Rational expectations; Bayesian Nash equilibria; Measurability; Price-collusion
Financial stability under climate stress: Empirical evidence from Namibia
Climate change has emerged as one of the defining risks in recent years. These risks are associated with economic losses and, eventually, the financial system's stability. This paper empirically examines the impact of climate change on financial stability in Namibia. This study employs a Nonlinear Autoregressive Distributed Lag (NARDL) approach to examine how climate change asymmetrically affects the stability of Namibia’s financial system, using quarterly data from 2009 to 2023. The findings reveal that fluctuations in temperature and rainfall have a detrimental asymmetric effect on financial stability. Interestingly, both increases and decreases in CO2 emissions are associated with improvements in financial stability. Therefore, the study recommends the integration of climate-related risks into financial institutions’ risk assessment frameworks and the adoption of long-term risk monitoring and mitigation strategies. Furthermore, the study also recommends that regulators should conduct climate stress testing to assess the resilience of the financial system stability under varying climate scenarios.
asymmetric autoregressive distributed lag models
Macroeconomic Economics and Climate Change
Internal Markets and M&A Efficiency Gains: Evidence from Bank Branch-level Data
We study how firms reallocate internal resources after an M&A operation. We focus on the banking sector and leverage matched employee-branch data and branch-level financial information. Firms use the enlargement of internal labor and capital markets triggered by the M&A to reallocate resources within the organization. Labor and internal funds are reallocated to acquirer branches. Restructuring enhances profitability at both acquirer and target branches, even after accounting for local market power gains. We show that these effects are more prominent in municipalities where the consolidated bank had larger local internal labor markets at the time of the consolidation.
Unravelling the spatiotemporal dynamics of unemployment rates in district municipalities in South Africa: A disaggregated analysis for informed policymaking
Statistics South Africa serves as a crucial source of national and provincial data. However, obtaining detailed estimates of the unemployment rate at more localized levels often poses challenges due to insufficient sample sizes for reliable estimates. This issue is further complicated when data is disaggregated by gender and age groups. This study utilizes a spatiotemporal small area estimation technique to address these challenges. This approach combines spatial and temporal dimensions, employing data from the Quarterly Labour Force Survey and the 2016 Community Survey. The results indicate that women encounter greater barriers to employment than men. Additionally, unemployment rates are notably high among the youth age groups. The study also reveals a substantial gap between urban and rural districts in South Africa. These findings are vital for identifying districts and demographic groups with high unemployment rates. This information can inform targeted and effective policy measures to reduce unemployment and improve job opportunities.
Competition Policy in South Africa: From 1994 to Now
This paper examines the evolution of South African competition policy since the Competition Act of 1998, focusing on merger control and anti-cartel enforcement. Using a Bayesian decision-theoretic framework, the analysis evaluates whether enforcement trends are driven by research and policy experience or by shifting policy preferences. The findings reveal two divergent paths: merger control has become significantly more interventionist with broader theories of harm, largely driven by changing policy preferences rather than empirical evidence; meanwhile, anti-cartel enforcement expanded rapidly before stabilising, with its growth primarily supported by learning effects and international practices, though recent novel interpretations of collusion also reflect preference shifts. The paper identifies tensions between these approaches—one evolving based on economic literature and international precedent, the other shaped by policymaker preferences. It concludes that competition policy dominated by preferences rather than systematic, evidence-based evolution may undermine effective competition enforcement, even when pursuing broader objectives beyond economic efficiency.
Monetary Policy in South Africa: From 1994 to now
The evolution of South Africa’s monetary policy over the past three decades has demonstrated its ability to manage both external shocks and domestic economic volatility. The adoption of inflation targeting and the South African Reserve Bank’s (SARB) role as a “credibility provider of last resort” have shaped monetary policy in response to the country’s structural uncertainties. This paper reviews the trajectory of South African monetary policy from 1994 to the present, outlining key policy shifts, challenges, and outcomes. Monetary policy has a risk management function that is as important as its traditional monetary policy role. The evolution of the country monetary-fiscal policy framework should favour a reduction of long term inflation, and a reduction in the country risk to support an increase in productivity and a reduction in the economy cost-base.
Industrial Policy in South Africa: From 1994 to now
This policy paper critically examines South Africa's industrial policy evolution from 1994 to 2024, assessing its alignment with developmental objectives in a middle-income country context. The Paper explores the transition from apartheid-era policies to post-apartheid frameworks, focusing on the tension between liberalisation and state-led interventions through initiatives, such as the Industrial Policy Action Plans (IPAPs), master plans, and the Black Industrialists Programme. The analysis identifies persistent structural challenges, including stagnant performance on economic complexity and structural change. Through a comparative lens, the Paper situates South Africa's industrial strategy within global best practices, offering policy recommendations to take advantage of new opportunities presented by the green economy and continental integration.
Environmental Policy in South Africa: From 1994 to now
South Africa’s environmental policy has evolved significantly since 1994, reflecting shifts in global sustainable development frameworks and growing recognition of the interdependence between economic, social, and environmental objectives. Initially, policy efforts prioritized economic growth and social development, with environmental concerns viewed as secondary. However, as climate change and biodiversity loss emerged as critical threats, policy approaches expanded to integrate sustainability principles, culminating in the country’s commitments under the Paris Agreement and the adoption of a Just Transition framework. Despite progress, South Africa remains highly vulnerable to both physical and transition risks associated with climate change, exacerbated by socio-economic inequalities, governance challenges, and a historically carbon-intensive growth model. This paper argues that South Africa’s existing policy trajectory—characterized by sectoral approaches and incremental reforms—is insufficient to address systemic risks and unlock the full potential of a green, inclusive economy. A more integrated, coherent strategy is needed, leveraging synergies between environmental sustainability, economic growth, and social development. Emerging evidence suggests that a transition to a low-carbon, climate-resilient growth model can drive investment, job creation, and economic inclusion while mitigating climate risks. However, realizing this potential requires targeted policy interventions, institutional reform, improved coordination across government and sectors, and robust investment in green infrastructure and nature-based solutions. By aligning policy and economic planning with sustainability imperatives, South Africa can build a more resilient and equitable future while enhancing its global competitiveness in an era of climate-aligned growth.
Labour Policy in South Africa: From 1994 to now
What are the key developments in the South African labour market since the end of apartheid? We use data spanning from 1993 to 2019 and estimate trends in employment, earnings, and educational attainment. We do this for the overall population and then compare how things have changed for groups defined by race and gender. We then perform Oaxaca-Blinder decompositions to better understand the racial and gender gaps in employment and earnings. Finally, we summarise the key legal changes and policies that are likely to have shaped the labour market and reflect on their likely roles in the temporal changes that we observe. Our empirical results show that there was a sustained improvement in employment and earnings outcomes in the early 2000s and that this was experienced broadly across all segments of the workforce. This pattern changed following the global financial crisis. When analysing the gaps in outcomes between men and women, there has been clear progress in the reduction of both employment and earnings gaps over time, although substantial gaps remain. In contrast, there has never been a meaningful reduction in the racial employment and earnings gaps. This is true despite substantial increases in educational attainment among African and Coloured people. Our results suggest that this lack of convergence could be explained by two other developments. First, White people also increased their education levels, although in this group, the increases are mostly at the tertiary education level. Second, the rates of return to tertiary qualifications are very high and have increased over time. These two factors combine in the labour market and result in the depressingly large and stable racial employment and earnings gaps.
Fiscal Policy in South Africa: From 1994 to now
During the first three decades of post-apartheid South Africa, its fiscal policy deteriorated from healthy to unsustainable. Four phases are identified on the basis of macro fiscal features and in the context of domestic and global politico-economic trends and changing views of the role of government in the economy. Policy measures and outcomes are described, assessed and compared to that of peer countries, with cognisance of the interplay between macro and micro fiscal issues, and stabilisation and structural policies. Policy priorities in the various finance ministers’ budget speeches appear in an appendix. After the post-apartheid government took office in 1994, earlier concerns about public debt and fears of populism were effectively arrested with successful fiscal consolidation (phase 1, 1994-1999) and followed up (phase 2, 2000-2008) with a healthy fiscal track record during and after the country’s longest economic upswing since the second world war. Phase 3 (2009-2020) is described as a fiscal storm, being the result of the impact on the fiscus of the great recession, micro fiscal populism, state capture and the Covid-19 pandemic. The hard-earned investment grade credit rating was lost when foreign government bonds received junk status. The fiscal strategy was not adjusted to the lower economic growth rates and prospects. Eventually the policy focus did shift from mere reliance on growth as a panacea for fiscal sustainability, to direct fiscal reforms, when a fourth phase (consolidation, again) was entered in 2021. The main conclusions are that a major revision is overdue of the economic growth strategy – which should be unambiguously implemented, that government expenditure reprioritisation is imperative to ensure fiscal discipline, and that fiscal sustainability in the final analysis depends on an inseverable umbilical cord between the president and the finance minister, rather than fiscal anchors.
Post-School Education and Training Policies in South Africa: From 1994 to now
During apartheid, the Post-School Education and Training (PSET) system was deeply fragmented, unequal, and racially biased, with vast disparities in access, resources, and quality. Legislation, provision, and institutional structures explicitly enforced a racial demarcation between skilled and non-skilled workers. The transition to democracy presented an opportunity to transform the PSET sector. The new government aimed to create an inclusive, integrated education system that would meet the needs of a rapidly transforming economy, respond to the demands of a modern labour market, and promote social justice. Policy interventions were therefore required to address structural deficiencies, expand access, and improve quality. In this paper, we summarise some of the key post-apartheid PSET policies, evaluate what empirical evidence shows about progress in the sector, taking stock of key trends, and finally, discuss some of the challenges and tensions that remain.
Basic Education Policy in South Africa: From 1994 to now
The paper reviews the history of democratic South Africa’s education policies, with a focus on learning in the early grades. Foundational learning is now a high educational priority, in South Africa and beyond, to a far greater degree than three decades ago. Following intensive policy reforms to dismantle apartheid education, in 2005 new results from an international assessment indicating relatively poor learning at the primary level prompted the 2007 launch of the Foundations for Learning (FFL) initiative. While at face value, the FFL strategy was appropriate and led to an internationally recognised national workbooks programme, it was compromised by two problems common in South Africa: weak design of several intervention tools, in part due to an insufficient appreciation of South Africa’s linguistic complexities; and a lack of complementarity between the initiative’s various elements. Among risks arising from this was a weakening of the state’s position in ongoing bargaining with teacher unions. Yet learning outcomes at the primary level improved according to international assessments, suggesting that even a flawed package of interventions can have an impact. The fidelity and cohesion of policies and tools aimed at improving learning outcomes should be strengthened in the coming years to sustain the trajectory of progress. In doing this, the country should learn not just from practices in educationally successful developing countries, but also from pioneering work in pockets of the South African system.
Health Policy in South Africa - From 1994 to now: Towards convergence between public and private health financing
Optimism about the prospects of better healthcare for all ran high after SA’s peaceful transition to democracy in 1994. This policy paper reviews a series of health reforms instituted after the end of apartheid up to the president’s assent to the National Health Insurance (NHI) Act 30 years later. It considers which policy interventions have been most significant, the missed opportunities, and the role of various forms of collaboration between the public and private sectors. Given that the ANC’s NHI Act faces intense opposition from other political parties within the government of national unity and from other stakeholders intent on litigation, implementation is likely to be delayed. We therefore pose the question: if not NHI, then what? Informed by a series of discussions with experts, we argue that for a return to key steps in the reform path envisaged in the 1990s, seemingly abandoned after 2007. We suggest several ways in which greater collaboration between the public and private sectors should be sought, and in which regulated competition offers scope to improve healthcare in the medium term while contributing to more equal access to health services. This analysis is based on a review of national legislation, policy documents, peer-reviewed publications, commissioned reports, presentations to parliament and conferences, media articles, and the views of experts in the field. In-depth interviews of up to two hours were conducted with 13 key informants chosen for their experience and insight into health policy development and implementation. They include academic researchers, independent health analysts, and senior figures from the public and private sector.
Immigrant Special Visas and Local Employment: evidence from South African metropoles
This paper sought to investigate why immigrant special permits can have different impacts on the local employment outcomes in locations within the same country. The paper specifically investigated the association between the Zimbabwe Exemption Permit (ZEP) and local employment outcomes and formalization of foreign labour in Cape Town and eThekwini, cities in South Africa that have different industrial specializations and labour demand. Bivariate maps and the event study model were used to investigate whether the increase in the foreign employment share was at the expense of local employment and whether the ZEP reinforced old spatial structures or new patterns emerged to suggest the formalization of foreign labour. The Ordinary Least Squares (OLS) interaction model was used to investigate the association between foreign employment and local employment in the CBD and along transport corridors as well as changes to the local person living at the average distance from the CBD and the main transport corridors. The results show that ZEP was associated with formalization of labour and a lot of complementarities between local and foreign labour in eThekwini and Cape Town, although in Cape Town, local labour lost jobs to immigrants in the CBD in 2018.
Zimbabwe Exemption Permit; Local Employment, Foreign Employment, Bivariate maps, Difference-in-Differences, Ordinary Least Squares; Cape Town; eThekwini, South Africa
Creative destruction or simple reshuffling? Turnover among businesses and jobs in South Africa
The concept of creative destruction emphasizes how the turnover of businesses and workers drives innovation, productivity gains and aggregate economic growth, even as individual firms and employees experience disruption. This article leverages administrative tax data for South Africa that measures flows rather than stocks, enabling a dynamic analysis of labour and firm adjustments. Our findings reveal unexpectedly high levels of churn in both jobs and business establishments, suggesting fluid rather than rigid markets. However, job and business creation mirror destruction, resulting in low net growth. Moreover, sectoral shifts over time have not increased the share of tradables, implying that structural transformation has stalled.
Public Transport, Sexual Harassment, and Social Norms:Some Evidence from South Africa∗
Research has highlighted various challenges facing public transport users, particularly women. We conduct a survey of 1000 male and female public transport users in South Africa to better understand the commuting experiences of these users, including vulnerability to sexual harassment and violence. Most of our findings support existing research. Interestingly, we note that both women and men overestimate other commuters’ tolerance for sexual harassment and unwanted sexual advances in the public transport setting. This finding could be leveraged in policies highlighting that most public transport users find such behaviours unacceptable. Existing research on the positive effects on behaviour of correcting erroneous normative beliefs suggests that communicating accurate norms might reduce engagement in behaviour (such as sexual harassment) that deviates from the accepted norms.
Determinants of Willingness to Bear the Costs of Climate Action: Insights from Cross-Country Survey Data
Using data from the 2020 International Social Survey Programme (ISSP), Environment IV module from 26 countries on about 29,183 individuals, we investigate the influence of socio-demographic factors, consumer behavior, environmental beliefs, opinions, and attitudes on the willingness to pay higher prices and higher taxes, as well as the willingness to reduce their standard of living of respondents in support of environmental protection. The findings reveal significant variations in willingness to bear financial burdens for environmental protection across different countries and socio-economic groups. Our analysis highlights the critical role of education, religion, political affiliation, and trust in institutions in shaping environmental attitudes and behaviors. Moreover, after controlling for individual characteristics, significant international disparities persist, with countries like India and some East Asian nations (e.g., Japan, South Korea) showing notably high willingness to bear the costs across all measures. Many European countries, despite their progressive environmental policies, show lower willingness for higher taxes which may be due to already high tax burdens. These findings underscore the importance of tailoring policy communications to different socio-economic groups, emphasizing both the immediate and long-term benefits of environmental protection to enhance acceptance among various demographic segments.
Unlocking the Potential of Cities as Drivers of Growth
This policy brief is based on papers and discussions from the “The Role of Cities as Potential Drivers of Economic Growth and Prosperity” Conference convened by Economic Research Southern Africa (ERSA) in Muldersdrift, Gauteng, from 31 October to 1 November 2024 in collaboration with the Human Sciences Research Council (HSRC); Spatial Economic Activity Data – South Africa (SEAD-SA); and the University of the Free State (UFS).